Essays on the macroeconomics of monetary policy, financial frictions & growth

This thesis inspects the intersection among monetary policy, financial frictions, business cycle fluctuations and economic growth. Post-crisis episodes connoted by an enigmatic and enduring stagnation of the main macroeconomic aggregates, such as output and TFP, questioned the causes contributing to the slow recovery. I show the advantage of considering alternative channels, focusing on the interaction of interwoven fields often studied in isolation. As recent contributions documented a growing trend of credit-financed R&D expenditure, while it is well known the influence of monetary policy on credit conditions, a research linking everything seems crucial to understanding how current measures may spread their consequences over future outcomes and suggest the need for unifying trend-cycle analyses. Thus, the thesis unfolds as follows. In chapter 1, I review existing theoretical and empirical literature analysing the interaction of the above components, spanning from the early thought to the research frontier. In chapter 2, I shed light on the long-run effects of monetary shocks displaying through the credit channel of monetary policy. An estimation of the dynamic behaviour of credit- and innovation-related variables highlights the transmission channels, while a dynamic general equilibrium model explains how recessionary shocks develop into persistent stagnation. Finally, in chapter 3, I extend the study to the enduring effects generated by the full set of unconventional monetary policies implemented in recent years. As in the case of conventional policy, unconventional expansionary measures are capable of influencing real aggregates over longer horizons than generally believed. Despite being qualitatively similar, their magnitude is quantitatively reduced in the long run.